The PLO prepared Sunday to delay its much-trumpeted plans to declare an independent state and give Palestinian leader Yasser Arafat the power to set a new date, arming him with a fresh diplomatic weapon in his battle with Israel for a lasting peace accord.

"Most of those who spoke said the postponement must not go beyond the end of the year and this is what I am sure will happen," said Salim al-Zaanun, chairman of the Palestine Liberation Organisation's Central Council.

Palestinian minister of parliament Nabil Amr said the delay was necessary to enable the revival of peace talks with Israel.

A Palestinian official said the negotiations would resume on Monday, but Israeli officials would not confirm the date.

The White House on Sunday reaffirmed its determination to make an aggressive push for a Middle East peace settlement in coming weeks, although Israeli Prime Minister Ehud Barak said he was "not sure" they would be able to reach a comprehensive peace deal in coming weeks.

But he said a delay in a unilateral declaration of a Palestinian state would be "a positive sign."

The 129-member Central Council will empower the PLO's Executive Committee -- headed by Arafat -- to set a new deadline, so long as it reports to the council by November 15, according to a member of the committee drafting the final statement.

It was not clear, however, if the executive committee would be able to announce statehood at any time, or be required to make the proclamation before the end of this year.

Arafat was originally to have declared the creation of independent Palestine in May 1999 -- the end of interim self-rule under the 1993 Oslo accords -- but held off under international pressure.

Again this year, Israel and the United States pushed Arafat not to make the statehood proclamation in the absence of a peace agreement, with US President Bill Clinton warning that Washington would likely sever relations.

Israeli cabinet minister Amnon Lipkin-Shahak said that such a declaration would trigger a crisis in the peace process.

"All contacts would be broken off and the Israeli government would be forced to take unilateral measures," said Lipkin-Shahak, a former army chief.

The Central Council, the PLO's second most important decision-making body, began its deliberations here Saturday on the statehood proclamation, planned to coincide with a September 13 deadline for a peace accord.

Zaanun told reporters that an open-ended delay would only maintain the status quo and would not advance the Palestinians' 52-year struggle for independence.

"An open postponement means giving Barak the ability to carry out his plan to keep the Palestinian people under an administrative self-rule authority forever," he said.

Many PLO members have said in Gaza that they favored building a Palestinian state de facto, rather than by proclamation, by setting deadlines for the creation of much-needed state institutions.

Barak's spokesman Gadi Baltiansky said Sunday that the prime minister is ready to strike a deal with the Palestinians that defers the most sensitive issue dividing them, the future of Jerusalem.

"But this idea is not practical for the moment because Yasser Arafat has rejected it," Baltianski said from New York.

The Camp David summit collapsed in July because of deep divisions over Jerusalem, the holy city which both sides claim as their capital.

Israel and the Palestinians must also settle the final borders and exact status of the Palestinian areas, water-sharing, Palestinian refugees and Jewish settlements.

The militant Palestinian Islamic movement Hamas has vowed to pursue armed resistance against Israel even if peace negotiations result in the declaration of an independent Palestinian state -- GAZA CITY (AFP)